"September is a transition period where you have a lot of college students quitting jobs and high school students coming into the labor force," he said.

Throughout Virginia, there were 117,600 people unemployed in September. The September statewide unemployment figures were up seven-tenths of a percentage point from August's rate of 3 percent. Unemployment nationwide in September was 5.1 percent.

Employment in the trade, construction, service and finance employment sectors was strong, and the state should see a drop in unemployment in October, Mezger said.

"The October rate is probably going to be lower, in the 3.4 to 3.2 percent range, because the students will either find work or stop looking," he said.

Construction and tourism sectors will continue to operate at high levels and activity in the retail sector is picking up.

"Activity in the retail sector will stay up because of Christmas," Mezger said.

Employment in the non-manufacturing segment of the state's economy employed a record-setting 2,923,700 workers in September. He said that increase reflects the return of school employees to the workforce after a summer sabbatical.

A record-breaking 150,900 people were employed in the transportation and utilities sector statewide. Mezger attributed that increase to the settlement of the telephone strike and the shipping of fall merchandise.

Mathews County reported the lowest unemployment rate in September of nine-tenths of a percent. Russell County posted the highest at 11.2 percent.

Federal employment in Hampton Roads decreased slightly in September to 55,300. Area manufacturing employment totaled 66,500, an 800-job decrease from August. Employment in the transportation equipment segment, which in cludes area shipyards, remained virtually equal to August at 34,100, but is down 1,400 jobs from September 1988.

"As work has been completed, there looks like there has been some attrition," Mezger said.

September's jobless rate is the latest in a long line of record jobless rates set in the state this year.

August's 3 percent rate was the lowest in the state in 18 years and the lowest in the continental U.S. that month. Only Hawaii, at 1.8 percent unemployment, posted a lower rate.